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ADEL KALEMCİLİK TİCARET VE SANAYİ A.Ş.
Earnings Release • Aug 11, 2025
8725_rns_2025-08-11_e380ac71-9ef8-4690-868c-2d9dc12cccd9.pdf
Earnings Release
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JANUARY-JUNE 2025 EARNINGS RELEASE
Financial Performance
Disclaimer
As required by the Capital Markets Board, our H1 2025 financials have been adjusted to account for the effects of inflation pursuant to TAS 29 ( "Financial Reporting in Hyperinflationary Economies"). For this reason, all financial statements presented herein, including comparative data from earlier reporting periods, have been restated in accordance with TAS 29 to account for changes in the overall purchasing power of the Turkish lira. The resulting figures are indicative of the Turkish lira's purchasing power as of 30 June 2025.
| (TRL million) | 1H24 | 1H25 | % |
|---|---|---|---|
| Net Sales | 1,730 | 959 | -45% |
| Gross Profit | 963 | 413 | -57% |
| EBITDA (BNRI) (1) | 532 | 14 | -97% |
| Net Profit/(Loss) before Tax | 250 | -230 | a,d, |
| Net Profit/(Loss) | 201 | -165 | a,d, |
| Net Working Capital | 1,637 | 1,562 | -5% |
| Net Financial Debt | 997 | 1,424 | 43% |
| Free Cash Flow | -755 | -1,003 | -33% |
| Gross Profit Margin | 56% | 43% | |
| EBITDA (BNRI) (1) Margin | 31% | 1% | |
| Net Profit Margin | 12% | -17% |
* All figures and tables in this report include IFRS16 impact.
(1) BNRI: Before non-recurring items
Net Sales (TRL million)
-45% decrease
Our net sales decreased by 45% year-over-year, totaling TRL 959 million. This decline can be attributed to the delay in shipments compared to the same period in the previous year, as well as the overall economic slowdown in the stationery sector, the general economic environment and economic uncertainties in 2025. Furthermore, the overall stagnation observed in the stationery sector has exerted considerable pressure on demand, directly affecting our sales volume and revenue.
Our gross profit decreased by 57% compared to the same period last year, totaling TRL 413 million. Besides the decline in sales revenue, the reduction in gross profit and gross profit margin was due to our inability to pass on the rising unit costs-caused by the economic climate, sector downturns, and inflationinto our prices.
Our EBITDA (BNRI) for the first half of this year amounted to TRL 14 million. The reduction in gross profit, alongside the decrease in sales revenues, coupled with the strain on operating profitability at existing revenue levels due to fixed costs, has led to a downturn in EBITDA (BNRI). In particular, operating expenses remained relatively high compared to the decreased sales volume, which adversely affected operational profitability and led to a year-over-year decrease in EBITDA (BNRI).
Net Working Capital (TRL million)
As of the first six months of 2025, our Company's net working capital requirement stood at TRL 1,562 million, marking a decrease compared to the level of TRL 1,637 million in the corresponding period in 2024.
This decrease is attributable to the decline in inventory and trade receivable levels, which corresponds with the contraction in sales volume during the period, as well as the efficiency in managing trade payables. Despite the declining operational volume, our Company has consistently managed its working capital in a controlled manner, implementing measures to optimize its cash cycle accordingly.
Net Financial Debt
Net Financial Debt/EBITDA (BNRI)**
As of the first six months of 2025, our Company's net financial debt amounted to TRL 1,424 million.
The substantial cash advances received in the first half of the previous year diminished the financial debt requirement during that period. In addition, the escalation in financing requirements alongside the contraction in sales volume led to an increase in net financial debt.
Free Cash Flow
As of June 2025, Adel showed a negative free cashflow of TRL 1,003 million. This is TRL 248 million less than what it was at as of June 2024.
-165 Net Profit (TRL million) 201 June 2024 June 2025
The overall economic slowdown and the stagnation within the stationery sector have significantly contributed to the decline in sales revenue and gross profit. The rise in financing expenses attributable to elevated interest rates has exerted further pressure on profitability, resulting in a net loss of TRL 165 million.
*Net Working Capital/Net Sales ratio is calculated on the basis of the previous twelve months' Net Sales figure.
**The Net Debt/EBITDA (BNRI) ratio is calculated on the basis of the previous twelve months' EBITDA figure.
Financial Performance
Risks
Financial Risks: In accordance with the dynamics of the industry in which our company operates and the financial instruments it employs, our company may be subject to a variety of financial risks, including mainly interest rate risk, liquidity risk, currency risk, and receivables risk. Our company meticulously defines, assesses, and manages risks in order to mitigate the impacts of these risks, which are related to uncertainties and market fluctuations.
Within the framework of our risk management strategy, potential risks are systematically mitigated and their impacts are reduced through the implementation of established procedures and policies. In this context, our company adopts a proactive approach to ensure financial sustainability and operational assurance.
Interest Rate Risk: Aligning with the requirements of the industry in which it operates, our company operates with high working capital during the first nine months of the year, which increases its sensitivity to changes in credit interest rates. Fluctuations in interest rates may occur due to geopolitical risks and macroeconomic indicators in our country.
Our company finances its net working capital needs that may arise in the course of its operations through equity and, when necessary, loans. Measures taken against liquidity risk and
interest rate risk include closely monitoring the maturity structure of loans, extending short-term liabilities to longer terms, bond issuances, evaluating receivables through discounting methods, and diversifying funding sources with alternative financing instruments. In this context, our company maintains a dynamic approach to financial planning.
By virtue of our disciplined and effective financing policies, our operations are supported by borrowing costs below market interest rates. In the upcoming period, we will continue to prioritize efficiency in financial management to ensure the sustainability of our robust balance sheet.
Currency Risk: Our company is exposed to currency risk due to its commercial activities, as its foreign currency liabilities exceed its foreign currency assets. To mitigate the impacts of this risk and protect against cost fluctuations, derivative financial instruments are employed as a hedge against currency risk.
In line with our risk management policy, at least 50% of the currency risk is hedged, thus ensuring that the impact of exchange rate fluctuations on financial performance is effectively managed. Currency risk management contributes to our company's long-term financial sustainability and strong balance sheet goals. As of end-June 2025, 87% of our currency risk exposure was hedged against.
Receivables Risk: In the last quarter of the year, our company collects payments for orders received during the campaigns and trade fairs held at the beginning of the year. To minimize receivables risk and streamline collection processes, various payment systems, including credit cards, the Direct Debit System (DDS), Vinov, and checks, are effectively utilized upon the shipment of these orders.
The credit card and other campaigns organized in the first quarter of the year to reduce receivables risk and working capital requirements provide significant convenience in collection processes. The remaining dealer receivables are managed through other secured payment systems and open risks are mitigated by obtaining letters of guarantee. This systematic and disciplined approach of our company supports the effective management of financial risks and contributes to sustainable growth.
The diversification of payment systems not only accelerates collection processes but also plays a crucial role in maintaining the stability of our company's cash flow.
Summary Balance Sheet
| (TRL million) | 31.12.2024 | 30.06.2025 |
|---|---|---|
| Cash and equivalents | 769 | 152 |
| Trade receivables | 153 | 683 |
| Inventories | 921 | 1,094 |
| Other current assets | 248 | 245 |
| Current Assets | 2,091 | 2,174 |
| Financial investments | 2 | 1 |
| Tangible assets | 922 | 914 |
| Right of use assets | 179 | 193 |
| Intangible assets | 104 | 94 |
| Other non-current assets | 18 | 66 |
| Non-Current Assets | 1,225 | 1,268 |
| Total Assets | 3,316 | 3,442 |
| Short term borrowings | 455 | 878 |
| Short term portion of long term borrowings | 130 | 123 |
| Trade payables | 155 | 213 |
| Other current liabilities | 225 | 247 |
| Current Liabilities | 965 | 1,461 |
| Long term borrowings | 591 | 575 |
| Long term provisions | 41 | 39 |
| Deferred tax liabilities | 28 | - |
| Non-Current Liabilities | 660 | 614 |
| Equity | 1,691 | 1,367 |
| Total Liabilities & Equity | 3,316 | 3,442 |
Financial Performance
Summary Income Statement
| (TRL million) | 1 January - 30 June 2024 |
1 January - 30 June 2025 |
|---|---|---|
| Revenues | 1,730 | 959 |
| Cost of sales (-) | -767 | -546 |
| Gross Profit | 963 | 413 |
| Operating expenses (-) | -591 | -522 |
| Other Operating Income /Expense (net) | -2 | 3 |
| Operating Income | 370 | -106 |
| Income /(expense) from investment operations | -63 | -1 |
| Financial income/(expense) (net) | -145 | -219 |
| Monetary gains / (losses) | 88 | 96 |
| Income/(Loss) Before Tax from Continuing Operations | 250 | -230 |
| Tax income/(expense) | -49 | 65 |
| Net Income/(Loss) | 201 | -165 |
| EBITDA (BNRI) (1) | 532 | 14 |
| Profitability Ratios | 1 January - 30 June 2024 |
1 January - 30 June 2025 |
|---|---|---|
| Gross Profit Margin | 56% | 43% |
| Operating Profit Margin | 21% | -11% |
| Net Profit Margin | 12% | -17% |
| EBITDA (BNRI) (1) Margin | 31% | 1% |
| Market Capitalization as of June 30th (TRL thousand) | 11,588 | 8,176 |
(1) BNRI: Before non-recurring items
Forward-Looking Statements Disclaimer
This document contains forward-looking statements concerning future performance and should be regarded as the company's good faith assumptions about the future. Such forward-looking statements reflect management's expectations based on currently available information at the time they are made. Adel's actual results are subject to future events and uncertainties that may significantly affect the company's performance.
Additional Information
SUMMARY FINANCIAL INDICATORS NON-COMPLIANT WITH TAS 29
The financial information provided below does not include the effects of TAS 29 and is provided for analysis purposes only. These figures are not compliant with the financial report for the period 01.01.2025- 30.06.2025 and have not been subject to independent audit.
| (TRL million) | 1H2024 | 1H2025 | % |
|---|---|---|---|
| Net Sales | 1,209 | 933 | -23% |
| Gross Profit | 787 | 509 | -35% |
| EBITDA (BNRI) (1) | 468 | 97 | -79% |
| Net Profit/(Loss) before Tax | 299 | -179 | n.m. |
| Net Profit/(Loss) | 262 | -119 | n.m. |
| Net Working Capital | 972 | 1,264 | 30% |
| Net Financial Debt | 738 | 1,424 | 93% |
| Net Financial Debt (excluding IFRS16 impact) |
615 | 1,263 | 105% |
| Free Cash Flow | -483 | -990 | -105% |
| Gross Profit Margin | 65% | 55% | |
| EBITDA (BNRI) (1) Margin | 39% | 10% | |
| Net Profit Margin | 22% | -13% |
* All figures and tables in this report include IFRS16 impact.
(1) BNRI: Before non-recurring items
Additional Information
-990
Information for Investors
Investor Relations Contact Information
| Evren Cankurtaran CFO |
Fatih Çakıcı Accounting Manager |
Ümit İbiloğlu Reporting and Investor Relations Supervisor |
|
|---|---|---|---|
| Investor Relations Unit Manager |
Investor Relations Unit Officer |
Investor Relations Unit Officer |
|
| E | [email protected] | [email protected] | [email protected] |
| T | +90 850 677 70 00 | +90 850 677 70 00 | +90 850 677 70 00 |
| F | +90 850 202 72 10 | +90 850 202 72 10 | +90 850 202 72 10 |
www.adel.com.tr
